As quarterly financial reports start to pour in from IT bellwethers like Google, Nokia and Intel, industry insiders are not worried so much about what happened last quarter as what's in store for the rest of the year.

Judging from results so far, as well as some industry reports on the PC sector, the first quarter went about as badly as -- and in some cases a little better than -- expected. What's more important, there are signs that some sectors of IT have hit bottom for the year.

In a sign that the recession is taking a bite out of Google, considered practically an unstoppable force in Internet search advertising, revenue for the company declined from the last quarter of 2008, its first sequential revenue decline ever. Revenue for the first quarter was US$5.5 billion, up 6 percent from last year but down slightly from $5.7 billion in the fourth quarter last year.

However, Google also reported Thursday that its first-quarter net income increased to $1.4 billion from $1.3 billion in the same period a year earlier. Excluding one-time items, earnings per share were $5.16, handily beating expectations of analysts, which were $4.93, according to Thomson Reuters.

Though the revenue decline shows that top-line growth is slowing, investors pushed up company shares by $9.62 to $398.30 in after-hours trading within an hour of the announcement. One reason why some investors may not be too worried about the sequential revenue decline is that Google at some point has to succumb to the law of large numbers: Essentially, the larger a company is, the harder it is to maintain top-line growth, especially in a recession. The better-than-expected profits also were cause to cheer.

Also Thursday, Nokia reported what was expected to be a terrible first quarter, as sales of mobile phones dipped below 100 million units. Revenue for the period was &#8364;9.3 billion (US$12.3 billion), down 27 percent from a year earlier. Profit went into free fall, hitting &#8364;4 million from &#8364;1.2 billion a year ago.

Nevertheless, there was a silver lining to the report. "Nokia expects industry mobile device volumes in the second quarter 2009 to be at approximately the same level or up slightly sequentially," the company said in its financial report, suggesting that it has seen a bottom to the handset market.

That cheered investors, who pushed company shares up by $1.52 to close at $14.88 for the day.

Intel's story Tuesday was similar, in that officials suggested they may have seen the worst this year. Though the company declined to provide specific guidance for the rest of the year, CEO Paul Otellini said in a statement that "We believe PC sales bottomed out during the first quarter and that the industry is returning to normal seasonal patterns."

Revenue for the quarter was $7.1 billion, down 26 percent from a year earlier, while profit was $647 million, down 55 percent. Earnings per share were $0.11, beating out expectations of analysts, who had forecast $0.03 per share.

Both Gartner and IDC this week released PC market reports for the first quarter and expressed cautious optimism. Of the two firms, Gartner was a little more cautious. It said worldwide PC shipments totalled 67.2 million units, a 6.5 percent decline from last year.

"We are seeing some evidence of channel inventory restocking, particularly in the US," said George Shiffler, research director at Gartner, in a statement. However, he declined to say that this means the market has bottomed out. "This restocking should not be interpreted as a recovery in PC end-user demand; it's still unclear if the global PC market has hit the bottom," he said.

tString := StoryDateLine + " (" + @Text(StoryFiledDate) + ") - ";
@If(datelineinbody = "No"; tString; "")On its part, IDC said PC shipments, fueled by netbook sales, were better than expected. IDC put the figure at 63.4 million shipments of PCs and netbooks, down 7.1 percent from last year. Earlier it had predicted an 8.2 percent decline. IDC maintains that this year doesn't look as bad as the dot-com bust.

Forrester Research also takes this stance. In contrast to 2001/2002, where companies cut IT budgets because they needed to digest all the spending they had done through the dawn of the Internet era right through Y2K, companies now need and want technology including cloud-computing services and infrastructure, according to Forrester. The reason IT spending has plunged is not because businesses don't want technology, but that they are hoarding cash until the financial markets stabilize, Forrester analysts have said.

Buoyed partly by tech stocks, markets rose broadly Thursday. The tech-heavy Nasdaq rose 43 points to 1670. The Nasdaq is in positive territory for the year, recovering from a seven-year low in early March. Whether this trend continues depends to a large degree on how the rest of earnings season goes.

To comment on this article and other PCWorld content, visit our Facebook page or our Twitter feed.